Ask ten MSP owners about their long-term plan and most will describe the same tidy arc: build it, sell it, ride off into the sunset. Rick Murphy uses episode twenty-two to make the case for a bigger, better version of that story. The owners doing the best for themselves, he says, aren’t stopping at one transaction — they’re running it back a second time, a third, and in a few cases he’s tracking right now, gearing up for a fourth.

That kind of repeat growth takes capital, and that’s where Nick Padlo joins the conversation. Nick is Vice President, MSP Financing at Live Oak Bank, and he’s built his career around financing MSP acquisitions, and he spends much of the episode showing owners that a profitable, recurring-revenue business can get serious bank backing without a warehouse of hard collateral behind it. His lending decisions lean on cash flow, recurring revenue, and customer concentration — the three things that actually predict whether an MSP can service debt and grow into it.

Rick and Nick also work through the math that makes leverage worth understanding. A three-hundred-thousand-dollar EBITDA acquisition barely registers, but stack the right financing underneath it and an owner can go after a company several times that size. Nick’s line captures it well: put the pieces together properly and one plus one plus one starts equaling five instead of two. Short version: the ceiling on growth through acquisition sits a lot higher than most owners assume, and getting there is more about the quality of your numbers than the size of your bank account.

Watch the episode and be sure to subscribe: Watch Cogent Conversations Episode 22

Key takeaways from this episode

• Repeat transactions beat a single payday. Rick tracks MSP owners running their second, third, and even fourth acquisition-fueled growth cycle, treating each deal as fuel for the next stage rather than a finish line.
• Cash flow carries more weight than collateral. Nick’s lending model is built around cash flow, recurring revenue, and customer concentration, opening the door for MSPs with little in the way of hard assets to still land serious acquisition financing.
• Leverage is the multiplier that makes bigger deals possible. The right bank financing turns a modest half-million-dollar EBITDA business into a credible buyer for something several times its size — Nick’s shorthand is that the math starts equaling five instead of two.
• There’s a real sweet spot for MSP borrowers. Nick’s client base clusters between two and six million dollars in EBITDA, with the smallest clients around half a million and the largest in the fifteen-to-twenty-million range — useful benchmarks for owners sizing up their own readiness.
• Clean numbers open doors faster than a bigger business does. Nick starts every relationship by asking for a few years of tax returns and an updated P&L, and he’s candid that a raw, unvetted data set usually tells an incomplete story.
• Every add-back has to earn its place. Nick flagged how often broker-represented deals stack on adjustments for practically everything, and why those numbers tend to collapse the moment a quality-of-earnings review or an experienced advisory team starts testing them.

The practical move here is starting the financing conversation before you’ve picked a target. Pull three years of tax returns and a clean P&L together, take an honest pass at which of your add-backs would actually survive a lender’s questions, and that first call with a bank — or with Cogent — starts from a position of strength instead of a scramble.